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Forex - GBP/USD hits session lows amid growth concerns

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Investing.com - The pound fell to session lows against the dollar on Monday amid concerns over the outlook for the faltering U.K. economy ahead of the Bank of England's quarterly inflation report later in the week.

GBP/USD hit 1.5707 during European morning trade, the session low; the pair subsequently consolidated at 1.5716, shedding 0.52%.

Cable was likely to find support at 1.5644, Thursday's low and an almost five-month low and resistance at 1.5809, the session high.

Sentiment on sterling was hit by expectations that the BoE would cut growth forecasts in Wednesday's inflation report and warn that inflation is likely to remain above the bank's 2% target until early 2015.

Last week the BoE warned that the economic recovery would be "slow and sustained" and "likely to remain muted in the near term" after it announced a decision to leave interest rates on hold at 0.5% and keep its easing program unchanged.

Elsewhere, the pound was lower against the euro, with EUR/GBP rising 0.66% to 0.8517.

The eurogroup of euro zone finance ministers was to hold talks in Brussels later in the session, following last week's European Union summit.

EU leaders reached an agreement on a seven year budget on Friday. European governments will contribute slightly less to this budget than they did for the previous seven year budget, following calls to curb spending by Brussels.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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